Bitcoin exchange-traded funds (ETFs) in the United States experienced a remarkable surge in trading volume, reaching a record-breaking $10 billion on March 5. This milestone was achieved just before Bitcoin’s price took a sharp decline of around 12% over the following five hours.
Bloomberg ETF analyst, Eric Balchunas, expressed his astonishment at the ETFs’ performance in a report on March 5. He referred to the trading volume as “bananas numbers” for ETFs that are less than two months old.
According to Bitcoin analyst Alessandro Ottaviani, the trading volume for these funds was slightly lower at $9.58 billion, but still surpassed the previous record of $7.7 billion set on February 28. Ottaviani’s data revealed that BlackRock’s iShares Bitcoin ETF (IBIT) had the highest volume at $3.7 billion, followed by the Grayscale Bitcoin Trust (GBTC) with $2.8 billion, and the Fidelity Wise Origin Bitcoin Fund (FBTC) with $2 billion.
Bitcoin experienced significant price fluctuations throughout the trading day in the United States. It reached a new all-time high of $69,200 around 3:00 pm UTC on March 5, but then dropped by 12% to a low of $60,860 within five hours, as reported by CoinGecko. At the time of writing, Bitcoin had partially recovered to $63,350.
Despite reaching a new high, Bitcoin had declined by over 6% in the past 24 hours. IBIT and FBTC both experienced an approximately 8.6% drop in value, with other spot Bitcoin ETFs also observing similar price decreases, according to Google Finance.
In a lighthearted remark, pseudonymous analyst Bit Paine jokingly referred to the price swing as a “monthly ritual during bull markets” to weed out “leveraged degenerates” among those new to Bitcoin through the ETFs. They highlighted the contrast with traditional markets, where governments intervene and provide bailouts if stocks experience a decline of more than 10% in a day.
Balchunas acknowledged the point made by Bit Paine and mentioned the protective measures in traditional markets, such as limit up and limit down rules, as well as the intervention of the Federal Reserve to prevent such occurrences.
Wolf Of All Streets, a magazine, expressed concerns about a world in which Bitcoin reaches $1 million, raising questions about the potential consequences of such a significant price increase.